Memorandum by Joseph Muscat MEP
I make this submission as a Member of the European
Parliament responsible for preparing an opinion for the Committee
on the Internal Market and Consumer Protection on the roaming
proposal. The replies below represent my personal views but are
not evidence in the technical sense. Nor should they be construed
as expert statements.
(i) Do you consider charges for making and
receiving calls on mobile phones when in a different EU Member
State to be appropriate or excessive as some have argued? Do you
think there is currently sufficient competition in the market?
Although many operators have recently reduced
international roaming charges, it appears clear that they have
been, and in many cases remain, very high compared to national
calls. Recent prices reductions would appear to largely be due
to political pressure. Mobile telephony today, including the ability
to make and receive calls in another country, is not a premium
product but a commodity. There does not appear to be any good
reason for a call being priced at a level very much higher than
for a national call simply because a border has been crossed.
I cannot opine on whether the higher prices
for roaming are due to lack of competition or to other structural
problems on the market.
(ii) Is it appropriate for the Commission
to introduce legislation to cap the cost of roaming?
Regulatory intervention, in particular of this
nature, should always be considered a last resort measure. Considering
the problems described by the Commission in its proposal and impact
assessment, I do believe it was appropriate for the Commission
to make the proposal.
(iii) Do you think that the mobile telecoms
industry has done enough in the last two years to address, through
self-regulation, concerns expressed by the Commission? Are National
Regulatory Authorities in a co-regulated environment able to address
these concerns on their own?
I am not aware of any industry wide self regulation.
The recent moves by various operators to reduce roaming prices
are of course to be welcomed. However, they remain high and absent
a regulation might revert to even higher levels. So I do not believe
the industry has done enough.
I believe the view expressed by the European
Regulators Group is that National Regulatory Authorities are not
able to address the concerns.
(iv) Does the proposed Regulation risk narrowing
down the space for competition and thereby harming innovation
and investment in the sector?
I do not believe so, and it is certainly not
the intention. Unintended consequences can occur, but there will
be close monitoring of the market and I take it that the Commission
will be prepared to present appropriate proposals in case of problems
of this nature developing.
(v) Do you think that the pressure for lower
roaming charges could potentially spill-over into higher prices
for other mobile telephony services? Would you anticipate any
other unintended consequences that may affect consumers?
Again I do not believe so. If it were to happen,
one way of viewing it is that the high roaming prices were used
as hidden subsidies for other services. That does not appear likely.
Of course, if there is concerted behaviour by operators to adjust
other prices, then I would believe that competition authorities
would take an interest.
(vi) Do you think that the proposed regulation
will allow non-EU operators to take advantage of lower wholesale
roaming prices in the EU through international trade agreements
and arbitrage opportunities?
I rely on the Commission's view that that would
not be the case.
(vii) Is the Commission's estimate that 147
million EU citizens are affected by excessively high international
mobile roaming charges accurate? Do you have any other figures
to offer?
I have no better estimate.
(viii) Do you think that the UK and French
proposal for a sunrise clause during the initial period after
the Regulation comes into force can better achieve the desired
effect? Should legislation apply solely to wholesale fees rather
than retail tariffs?
To be sure to achieve lower roaming prices at
the consumer level, a sunrise clause, which by definition would
delay the full impact of the regulation, is not helpful. For the
same reason, wholesale regulation only would not be an effective
option.
(ix) Do you believe that separate sub caps
for making and receiving calls should be applied or a single average
cap? Should the linkage between Mobile Termination Rates and wholesale
prices, and percentage mark-ups for determining retail prices,
be retained or should target prices simply be included in the
regulation?
I believe there should be a single average cap
at wholesale level, but that calls made and received at retail
level should be treated differently as no roaming charges are
applied at all for calls received. On balance, I believe using
formulae with linkages to Mobile Termination Rates etc, is preferable
as the methodology applied will be clearly expressed, as it allows
for the caps to be gradually adjusted and as the regulation may
need to be in place for some time. The choice is however not easy
as price caps, with no formulae, have the clear advantage of simplicity.
1 February 2007
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